What is the secret workaround for Russia, which is subject to economic sanctions, to import products and technologies from Western countries to maintain its economy?
Since the start of Russia's invasion of Ukraine in February 2022, many countries have imposed economic sanctions against Russia. However, Russian companies have been able to maintain their operations by obtaining various products and technologies from Western countries while avoiding sanctions. Foreign media The New York Times explains how Russian companies incorporate technology from Western countries.
Chinese Traders and Moroccan Ports: How Russian Flouts Global Tech Bans - The New York Times
Since launching the invasion of Ukraine in February 2022, Russian telecommunications company Convex needed equipment to transmit data to domestic intelligence services. However, because the equipment was sold by Cisco , an American network equipment development company, it was not readily available in Russia under economic sanctions.
Therefore, Convex successfully purchased the necessary Cisco equipment through a Chinese supplier, which does not impose economic sanctions on Russia, on a Russian mail order site called 'Nag'. Convex then visits the offices of the Russian Federal Security Service and installs equipment that will help classify the data and transmit it to the authorities.
As such, Russian suppliers have found loopholes and sought workarounds even under import restrictions and trade embargoes. According to The New York Times, basic communications and surveillance equipment, microchips that can be used in advanced computing and weapons systems, and drones are not very difficult to obtain in Russia. Many Russian companies import products through Chinese intermediaries and secretly sell Western technology products in countries that have taken a neutral position in the Russia-Ukraine conflict, such as Morocco and Turkey. Another method is to load it onto a ship bound for Russia.
Additionally, Russian suppliers and trade authorities are allegedly colluding to share transaction information. These activities have led to questions about the effectiveness of Western trade restrictions and the control technology companies have over who sells their products. Elina Rybakova, an economist at the Peterson Institute for International Economics in the United States, said, ``Western governments and big tech companies are trying to prevent products and technology from flowing into Russia, even though they know it's a never-ending game of cat and mouse.'' We must do more to prevent this.'
Another example is Moscow-based electronics manufacturer ProSoft. ProSoft, which sells biometric monitoring equipment and technology for heavy industry and critical infrastructure, had been importing microchips and sensors from Western countries until the invasion of Ukraine. However, with the start of the invasion, it became difficult to import precision equipment. Therefore, ProSoft sent an email requesting assistance to the Russian government's trade team stationed in Morocco.
Subsequently, in April 2022, the trade team contacted Morocco's national port director and secured a promise that ``if a Russian-flagged vessel enters our port, we can perform maintenance on it in the same way as vessels from other countries.'' . The trade team boasted, ``With our direct support, Morocco has transformed into a transshipment hub for electronic equipment.'' Technology products from Taiwan, China and other manufacturing locations are unloaded from ships at Moroccan ports and then loaded onto other ships bound for Russia.
The Russian trade team said, ``The partnership between Morocco and Russia is expected to be maintained for a long time, and the total trade volume could reach approximately $10 million (approximately 1.4 billion yen) annually.'' As a result of the trade team's efforts, ProSoft is able to sell approximately 300 products, including Intel chips, NVIDIA components, and Google-designed AI computer chips, even under trade restrictions. Masu. It has also been reported that chips manufactured in the United States have been discovered in Russian missiles and drones.
Since the invasion of Ukraine, it has been reported that Russia has relied on technology and supply chains from China, and according to Silverado Policy Accelerator, a non-profit organization that studies Russia's trade routes, as of March 2022. Approximately 85% of the semiconductors imported into Russia between September 2023 and 2023 were manufactured by manufacturers in China and Hong Kong. Before the invasion of Ukraine, the percentage of imported semiconductors made by Chinese and Hong Kong manufacturers was approximately 27%, indicating that Russia's dependence on China and Hong Kong is increasing.
During 2023, Russia will import hardware worth a total of 150 million dollars (approximately 21 billion yen) from China, and communication equipment that should be prohibited from exporting products to Russia is being used on various platforms. The fact that they can be purchased easily is seen as a problem.
In response to the current state of trade with Russia, communications equipment manufacturers Ericsson, Juniper, Nokia, and IBM claim that ``products were exported to Russia without our consent.'' In addition, Russian supplier OCS Distribution counters, saying, ``We do not sell products in violation of international sanctions or restrictions.''
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